Credit Suisse's Tidjane Thiam: His Achievements, His Mistakes
3. Did Thiam Face Significant Resistance?
The Pros
The past three years have certainly been no cakewalk for Credit Suisse or Thiam. A recipe for success developed at his previous employer, British insurer Prudential, worked at Credit Suisse: build a loyal team which pursues a common strategy and push it through it internally. In addition Thiam encountered far less «cultural» resistance than Cryan did at Deutsche Bank.
The Cons
The only threat to Thiam’s strategy came from the Credit Suisse's Wall Streeters: He pushed through a scaling back of risky trading positions and thus incurred billion-dollar writeoffs. At the same time he made condescending remarks about investment bankers who weren’t worth their money.
The response came in a heated campaign via the «New York Times» and «Wall Street Journal», which targeted the personal integrity of Thiam. He managed to calm the situation, replacing Tim O' Hara with Brian Chin, who personified the less risky strategy of the investment bank.
Resistance also came from the Credit Suisse results. The bank posted annual losses three years in a row under CEO Thiam, driven by write offs: in 2015 due to lower goodwill in the investment bank, in 2016 because of reserves to meet fines, and in 2017 due to tax issues. That Credit Suisse achieved operative improvements but were overshadowed by the annual losses will have annoyed him.
Thiam also ran into persistent resistance in the markets, and Credit Suisse’s share price has struggled to rise from its 2016 low point. Investors still see the bank’s business model in the light of the investment bank and its risks, and have yet to honor the stable pillar of revenue in wealth management.
4. Did Thiam Make Mistakes?
The Cons
Thiam’s biggest mistake was (and still is) his lack of sensitivity over management pay and bonuses. In his three years as Credit Suisse CEO Thiam, has earned almost 40 million Swiss francs ($40 million), compared with the bank’s accumulated losses of 6.5 billion francs. Thiam has been touchy on the issue of his salary and has only made concessions under considerable pressure from stake and shareholders. The reserved and modest impression he initially made in Switzerland quickly curdled into arrogance after the CEO conveyed that in principle he’s not to blame for the losses.
The Pros
He was able to iron out other mistakes. When the New York investment bankers threatened a revolt, he appeared on the scene personally to smooth things out. The painstaking preparations for a listing of the Swiss universal bank, which were then abandoned at the last minute, wasn’t a defeat, but rather a necessity to strengthen the capital base.
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